CAEATFA Manufacturing Sales and Use Tax Exclusion Program The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) Sales and Use Tax Exclusion (STE) Program exempts purchases of manufacturing equipment and machinery from state and local sales and use tax, a savings of 8-10%. Eligible manufacturers must be using the equipment in one of the following ways: 1. In an Advanced Manufacturing process. Examples: Aerospace, telecom, pharmaceutical manufacturers, etc. 2. To manufacture Alternative Source products. Examples: Solar PV manufacturers, wind turbine manufacturers, biofuel projects, etc. 3. To manufacture Advanced Transportation Technologies . Examples: Electric vehicle manufacturers, hydrogen vehicle manufacturers, etc. 4. To process Recycled feedstock or use Recycled feedstock in the production of another product or soil amendment. Examples: Materials recovery facilities, tire recyclers, etc.
Renewable Hydrogen Production Applicants Program Eligibility – Alternative Source (Renewable Fuel) Eligible Equipment Equipment used to produce renewable hydrogen (solar 1. panels, Electrolyzer, etc.) May include pumping equipment associated with a 2. hydrogen production facility, but a service station itself is ineligible The Application Applicants must fill out the “Other Application Types” tab 1. of Part B of the Application Staff will work with applicants to determine the benefits of 2. each individual project
CAEATFA Manufacturing Sales and Use Tax Exclusion Program Applications accepted on a rolling basis Application Submission Application Evaluation • Application submitted 60 days prior to a • Staff reviews application. monthly Board meeting. • Applicant responds to staff questions. • Application Fee of 0.05% of Qualified • Project evaluated based on fiscal and Property (QP). environmental benefits to State. • Two-part application process: Part A • Staff makes recommendation whether to (Narrative) & Part B (Spreadsheet) approve application. Post-Approval Process CAEATFA Board Review • Enters into legal agreement with CAEATFA. • Board reviews staff recommendation and • Administrative fee of 0.4% of QP . votes at Board meeting. • Semi-annual reporting of purchases. • Board resolution authorizes Executive Director to enter into a legal agreement • 3 Years to purchase equipment with the applicant. (standard). • 15% of QP must be purchased within 1 year.
CAEATFA Manufacturing Sales and Use Tax Exclusion Program Sample Fees and Estimated Net Savings Application Fee: 0.05% of the Qualified Property amount identified in the Application (minimum $250, maximum $10,000) Administrative Fee: 0.4% of the Qualified Property amount approved by the Board (minimum $15,000, maximum $350,000) Qualified $1,200,000 $15,000,000 $230,000,000 Property Amount Application Fee $600 $7,500 $10,000 Maximum Administrative $15,000 $60,000 $350,000 Fee Estimated Sales and Use Tax $100,320 $1,254,000 $19,228,000 Excluded* Estimated Net $84,720 $1,186,500 $18,868,000 Savings *Estimated tax and savings are based on a statewide average sales tax rate of 8.36%. Actual taxes and savings may vary.
CAEATFA Manufacturing Sales and Use Tax Exclusion Program Statute limits the Program to awarding $100 million in STE per calendar year. Applications received but not awarded due to the cap will be placed on a waiting list until the next calendar year. For more information: Website: http://www.treasurer.ca.gov/caeatfa/ste/index.asp Email: caeatfa@treasurer.ca.gov Phone: (916) 651-8157
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